Where is the market headed?
It was a relatively quiet day, which is not surprising following the very nice run-up during the previous session. The current flatness is not a cause for concern as the market is simply consolidating at its current level. Unless significant bad news emerges, the markets are likely to move higher.
A healthy sector rotation is currently underway; while public sector banks and defense stocks led the gains yesterday, other sectors took the lead today. Overall, the markets appear to be in fine fettle.
One of the most significant topics of the day is the performance of gold and silver, which are hitting new record highs daily.
Gold has reached almost $4,498 on the USD chart, while silver has hit $70. This move in silver is particularly surprising given that it was trading near $30 not very long ago. While mainstream media, such as the Financial Times, attributes this rise to geopolitical tensions, this view may be overlooking the deeper reality. Dismissing these record highs as temporary moves suggests that prices will revert once tensions subside, but that is rarely how such trends play out.
The real reason for this surge appears to be the rapid pace of de-globalization and de-dollarization occurring worldwide. There is a general reduction of confidence in fiat currencies across the globe.
Market Overview
Looking at the specific market charts, the day was extremely flat with a minor gain of 0.02%. After the strong performance of the last three sessions, the Nifty is still at the cusp of a huge breakout and could reach a new high very soon.
Nifty Next 50
In other indices, Nifty Junior gained 0.37%, Mid Caps rose slightly by 0.11%, and Small Caps climbed 0.42%.
Nifty Mid and Small Cap
Small caps are currently taking a larger lead each day and have recovered approximately 7% to 8% from their recent bottom.
Bank Nifty
Nifty Bank remained nearly flat at -0.01%.
GOLD
Gold rose 0.9%, bringing the rate to 13,688 INR per gram, a significant jump from 11,600 just two months ago.
SILVER
Silver followed a similar path, rising to 211000 within a few months. While a correction of 5% to 20% is always possible, the larger trend tells a story that cannot be ignored.
Advance Decline Ratio
The advance-decline ratio was relatively flat, ending at 285 advances to 215 declines.
Heat Maps
Notable performers included ITC, Tata Motors, UltraTech Cement, Coal India, HDFC Bank, Kotak Bank, and Shriram Finance. Conversely, Infosys, TCS, Bharti Airtel, Adani Ports, and Bajaj Auto lost some ground.
In the Nifty Next 50 space, IRFC, PFC, Swiggy, and Cholamandalam Finance did well, along with Hindustan Zinc, Ambuja Cement, and Jindal Power. Losses were seen in Motherson, CG Power, and Bank of Baroda, though no major downside moves were recorded.
Mover Of The Day
Nazara Tech was a mover of the day, gaining 6% after previously losing ground.
Sectoral Overview
Sectoral trends showed a 1% gain in public sector stocks. Some value investors have noted that within the Nifty framework, only a few stocks are trading at sub-20 times earnings, and these are mostly in the public sector.
From a value perspective, these are looking increasingly attractive. While IT lost 0.8%, other sectors like media, commodities, metals, and energy gained.
Sector of the Day
Nifty PSE Index
Public sector enterprises have moved up 2.8% in the last three days, driven by expectations of rate cuts for financials and anticipation of the upcoming budget. As December concludes, rumors regarding budget allocations are expected to start surfacing in the new year.
U.S. Market
US markets are also performing well, with major indices up about 0.5% and the Russell 2000 gaining 1% or more. Stocks like Merck, Oracle, Citigroup, Blackrock, and Charles Schwab saw gains, with Merck rising from $75 to nearly $100 in recent months. Some of these may be part of the internal US stock strategies, though these mentions are not formal recommendations.
Tweet Of The Day
Interesting data shows that the median age for a first-time home buyer in the US has increased to 40 this year. This age had remained steady in the early 30s for decades, but asset prices have surged while incomes have not kept pace.
This same pattern is playing out in India. While data might be less available, cities like Bengaluru, Hyderabad, and Gurugram have seen real estate prices double or triple since COVID-19, while incomes have only grown by 15% to 25%. This puts a significant squeeze on home buyers. It is recommended that individuals look to invest in and buy their own house whenever possible, as it is a great way to start an investment journey.
